A decade ago, 88% of a tech company's value was created post-IPO. For recent IPOs, 55% of the market cap creation happened while the company was still private, fundamentally changing where investors capture growth.

Unlike a decade ago, today's most transformative, high-growth companies like OpenAI and Anthropic are choosing to remain private for longer. This trend concentrates the highest potential returns in private markets, making it difficult for public investors to 'own the future' of technology.

The venue for tech value creation has dramatically shifted from public to private markets. For recent IPOs, over half of their market cap was generated while private, a stark reversal from ten years prior when 88% of value was created post-IPO.

Venture-backed private companies represent a massive, $5 trillion market cap, exceeding half the value of the 'Magnificent Seven' public tech stocks. This scale signifies that private markets are now a mature, institutional asset class, not a small corner of finance.

Tech's portion of US GDP has tripled from 4% to 12% since 2005 and is projected to continue growing. This underlying economic shift, accelerated by AI converting services to software, indicates that tech's total market cap has significant room for expansion, supporting more trillion-dollar companies.

The private market ecosystem exhibits extreme value concentration. Just 20 'platform companies' account for 80% of all private enterprise value, and a mere 4 companies are responsible for 65%. This power law reality dictates that being in these few key companies is all that matters for generating top-tier returns.

The current market is unique in that a handful of private AI companies like OpenAI have an outsized, direct impact on the valuations of many public companies. This makes it essential for public market investors to deeply understand private market developments to make informed decisions.

The private market for technology companies has ballooned to a $5 trillion market capitalization. This represents 15% of the NASDAQ and nearly a quarter of the S&P 500, signifying its massive scale and economic importance.

The trend of companies staying private longer and raising huge late-stage rounds isn't just about VC exuberance. It's a direct consequence of a series of regulations (like Sarbanes-Oxley) that made going public extremely costly and onerous. As a result, the private capital markets evolved to fill the gap, fundamentally changing venture capital.